Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

THE allure of instant gratification is hard to ignore. Living my best ‘Instagrammable’ life - whether it’s a pair of funky trainers with next day delivery, taking a city break in Barcelona or a cheeky Nandos - life can get expensive.

So, when I hit 25, I decided it was finally time to stop being reckless with my money. I value my financial independence, so it makes sense to make strides towards it. Here are three habits I'm practicing to build long-term wealth.

1. Let go of a get-rich-quick mentality 

When I scroll through my Instagram feed, I see a lot of twenty-somethings that have ‘made it’. Some live in fancy high-rise apartments, others wear the latest designer brands. It’s a luxurious world but it’s a far cry from the reality many young people live. 

Step out of the social media bubble and young people are having to battle with a cost-of-living crisis, high inflation, rising interest rates and six figure house prices. It’s no surprise then that the get-rich-quick mentality is appealing to people of my generation. 

I think this is the wrong approach. At 25, my greatest asset is time. That’s because the longer you invest for, the more opportunity there is to benefit from the stock market’s long-term growth. Of course, this is not guaranteed. 

Take the example below - which is for illustrative purposes only - as investment values can fall as well as rise, rather than give a steady return. Charges would also apply and reduce any returns. 

Petra starts investing £1,000 a year at 25 years old, while Jonathan investments the same amount from the age of 35. By the time they both reach 65, not only does Petra have significantly more money, she also stopped paying in at the age of 55. This is the power that starting investing early versus late can have.

The power of starting early

That’s why I’m opting for a get rich slow mentality. That means regularly saving in a Stocks and Shares ISA to look after some of my medium-term goals and a Self-Invested Personal Pension (SIPP) for my future retirement. 

2. Create good financial habits in my twenties

Like Meg Jay, author of The Defining Decade: Why Your Twenties Matter, said: “Feeling better doesn’t come from avoiding adulthood, it comes from investing in adulthood.” 

This is something that really rings true with me. Before I turned 25, I avoided my finances like the plague. 

I didn’t check my bank statements. I didn’t budget. And I didn’t save as regularly as I would’ve liked. Even checking my bank account made my heart skip a beat.

Now - despite the discomfort - I check in with my finances regularly. I review my monthly spending. I allocate a budget for my day-to-day costs like food, travel and socialising.  I ensure I have enough cash for my bills and most importantly I use my hard-earned salary to save for the future. 

I also put away a regular sum in an easy-access savings account in case of any emergencies. Before I knew it, these good habits had become second nature to me.

3. Focus my attention on my pension

I’m glad I regularly contributed to my pension since I started working, even if that meant less cash in my pocket. 

Like most young people, my first experience with a pension was through my workplace pension, where I was auto enrolled. Each month, I contributed a small sum, as did my employer. And I continued to do so when I moved to Fidelity.

Currently, the minimum pension contribution is 3% from employers and 5% from employees. But recently, there have been suggestions that the figure should be higher. 

New Financial, a think-tank, suggested a combined figure of 16% rather than 8%.

Even though I’m in a better place with my pension than many people of my age, I still try and add a little extra now and then - especially as the pension gap is a real issue for women.

Back in June, a government study revealed that women’s private pension pots in the UK are typically worth 35% less than for male colleagues by the time they reach 55.

And for every £100 accumulated in men’s private pensions, women have just £65.That’s shocking.

There are a lot of reasons for the pension gap - from lower wages to career breaks. And while I don’t know what the future holds, I’m conscious of doing what I can, when I can, to help close that gap. I’ve been known to contribute birthday money and bonuses, as well as one-off contributions occasionally too. I know it all adds up.

Turning 25 has certainly been eye opening in all sorts of ways. Practicing better financial habits makes me feel good. Rest assured, I’m still living my best Instagrammable life. It’s just on a budget.

Learn more about the unique financial challenge women face here.


1 The Guardian, June 5, 2023

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

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